MA bond authorities make transactions easier

Not-for-profit hospitals in Massachusetts are getting a bit of a break. The Massachusetts Health and Educational Facilities Authority, which issues tax-exempt bonds for the state's hospitals, plans to loosen up some of its oversight rules to help troubled borrowers rework their borrowing structure quickly. Hospitals are struggling due to a sudden collapse in the market for variable-rate "auction-rate" securities, which are seeing rising interest rates as bond insurers' credit is eroded by subprime mortgage woes. Today, many hospitals holding such debt are hoping to get out or at least refinance.

Thanks to the new rules, borrowers who want to refund or refinance auction-rate debt won't have to go through a two-month, two-step approval process. Now, bonds will require only one approval. What's more, the Authority's staff will not be above to approve conversions of auction-rate securities, rather than waiting for approval from the entire board. No word yet if other states are considering similar relief measures.

To learn more about the Authority's plans:
- read this Modern Healthcare article (reg. req.)

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